Land around govt infrastruture may cost more in West Bengal

KOLKATA: A road or a flyover can change the landscape. Residents along the EM Bypass know it better than anybody else. Land prices soared in these areas with land owners making hefty profits. Now they may have to share a part of their profits with the government.

The new Kamalgazi flyover on the southern fringes of the city connecting the Southern Bypass going to Baruipur is a case in point. The flyover itself has led to a spurt in development activities along this Bypass running parallel to NSC Bose Road with a host of housing projects, schools coming up in the area. The Mamata Banerjee government is mulling a direct levy — betterment fee — on landowners who are selling large plots around government infrastructure for big-ticket commercial projects. State municipal affairs department proposes the fee amount to be half of the land appreciation cost. The appreciation is the price difference of land when a government project is announced and when it is completed. The result is obvious. Land owners if asked to shell out “betterment fee” will factor in the levy while selling out the land to a developer, and developer will quickly pass it on to the consumer, pinching his pockets further.

“Residents in specific areas have benefited from several infrastructure projects — a flyover, a road, widening of the existing road. Land prices have appreciated in these areas. Landowners should share a part of their profit with the government because the land prices wouldn’t have gone up without the development projects. But we are not going to levy the charge on each and every one. We will begin with those who have sold large parcels of land to real estate or other commercial projects,” said state municipal affairs minister Firhad Hakim.

The proposal is part of the draft West Bengal Town and Country (Planning and Development) Amendment Bill, 2017, likely to be tabled in the assembly this week. Once the bill is passed, the government will frame the rules identifying the designated areas across the state where people at large have benefited from government infrastructure projects, road project, housing project or a re-housing scheme. “It goes without saying that residents in the upcoming smart cities will have to shell out the proposed betterment fee for the amenities on offer from the government side,” a state official said.

The proposal is not unique for Bengal. The Maharashtra government is also planning an impact fee on landowners in areas designated as benefit zones in Mumbai. Some others are considering models that will allow the government to share the benefits of asset price rise due to an infrastructure project.

The options include an impact fee to be levied on the landowners; an infrastructure fund where a certain share of the financial gains that a landowner has made exclusively due to the infrastructure project will be deposited; or a chargeable floor space index (FSI) based on transit-oriented development (TOD) charges.